With online auctions providing an opportunity to buy merchandise at prices well below retail (or a second chance at an item that's sold out in store), and penny auctions offering prices that are too good to be true, it's no wonder these sites are so popular. It's also why cyber criminals use them as a source to commit online fraud, like fake escrow services intended to act as third parties to hold and safeguard your money until goods are delivered, and identity theft.
You can protect yourself with these online auction safety tips:
- Make sure the site is legitimate by the number of items listed. If it's a big, well-known and secure site (the web address includes https://), it's a good sign that people trust it.
- Check out the seller's feedback rating. If it's more than 2% negative, take your business elsewhere.
- Be sure the seller is authenticated or address verified.
- Take a good look at the item for sale and the price. If it's too good to be true, it most likely is either fraud or counterfeit.
- Stay on the site to place your bid and complete the transaction. If the seller wants to negotiate by email, steer clear.
- Email the seller and ask for their phone and address details before you pay.
- If you're the seller, make sure a payment clears before you send the item.
- Keep a paper trail of receipts, emails and any other correspondence.
- Confirm that there is a telephone number and email address for customer service, and that they respond within 24 hours.
- Do not accept free trials by providing your credit card number or other personal information.
- Pay by credit card (not cheque or money order) when purchasing an item on an auction site.
- Ask about using an escrow service if the item is expensive (jewellery or a car, for instance). Escrow agents will hold your payment until they have been notified that the goods or services have been received by you. They will then send payment on your behalf to the seller, so you never have direct contact and your information is protected.
Be aware of these scams:
- The misrepresentation of an item, non-delivery of goods and services, as well as non-payment for goods delivered.
- Being asked to switch to other payment methods such as sending cash, money transfers or money orders. Criminals create fake escrow sites that pretend to safeguard your payment by holding it until your goods have been delivered. These fake escrow sites look legitimate but end up tricking people into paying them directly and they keep the money. Make sure the escrow service is credible, trustworthy and approved by the online auction service provider.
An overpayment scam, where a seller sends you a cheque for more than the sale price of an item and then asks you to cash the cheque and send the difference back to them.
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